The discovery of a giant oil field in the Falkland Islands has grown even more promising with islanders eager to cash in on the value of their natural resources in spite of the British government‘s war on fossil fuels.
The Sea Lion oil field, first discovered in 2010 in the North Falkland Basin roughly 135 miles (220 kilometres) offshore, was hailed at the time as potentially the biggest discovery of its kind since North Sea Oil.
But an updated report conducted in October by a top energy analysis firm estimated that some 917 million barrels of oil could be recovered from Sea Lion – roughly twice the annual output of the entire North Sea.
Rockhopper Exploration, the company leading the development, now plans to extract 532 million barrels – a substantial increase from its earlier estimate of 312 million that could lead to a potentially enormous economic boon for the British Overseas Territory.
The Falklands Islands Government (FIG) greenlit the exploitation of Sea Lion earlier this year after a consultation with the population of around 3,500 was reportedly met with widespread support.
A final decision on proceeding with drilling is expected next year with the first exploration of the field expected as early as 2027.
But the plans represent a significant thorn in the side of Sir Keir Starmer‘s Labour government which banned the issuing of new drilling licenses to oil and gas firms eager to exploit the North Sea days after taking office in July.
Labour is also racing to reduce carbon emissions by at least 68% by 2030, compared to a 1990 baseline as part of a wider goal of achieving net zero carbon emissions by 2050.
As a result, the government will not provide any financial support to the Falklands plan after Foreign Secretary David Lammy declared in September: ‘Action on the climate and nature crisis will be central to all that the Foreign Office does.’
The Falkland Islands constitute a British Overseas Territory and the UK is responsible for its engagement in foreign affairs and for its defence.
But power over governance of the islands domestic affairs is devolved to the FIG, so Westminster has no say over internal matters.
A statement released by a FIG spokesperson said: ‘The matter of development of the natural resources of the Falkland Islands is a devolved matter and is for the people of the Falkland Islands to decide.
‘Given the UK’s robust and continued support to uphold the Falkland Islanders right to determine their own future we would expect this to extend to our freedom to choose whether or not to develop a hydrocarbon industry, subject to all of the appropriate checks and balances.’
The Falklands remains one of the few territories that refused to sign the Paris Agreement – a treaty setting out climate change action to which more than 190 countries are signatories, as well as the European Union.
Meanwhile, a foreign office spokesperson told the Telegraph: ‘As the Foreign Secretary set out in his speech on the climate crisis, we are resetting the UK’s approach to climate and nature by rapidly delivering new more efficient ways to reduce emissions,’ he said.
‘Since 2001, the UK has ceased financial support for the fossil fuel energy sector, including in its overseas territories.
‘The natural resources of all UK Overseas Territories belong to the individual territories. Exploration of natural resources on the Falkland Islands is a matter for the Falkland Islands government and the private companies concerned.’
The diplomatic tension over the development of the Sea Lion field comes as the domestic debate over fossil fuels and the transition to clean energy rages in Britain.
The UK government under Prime Minister Keir Starmer is charting a dramatically different course to the Falklands, seeking to phase out fossil fuels and bolster renewable energy production.
As part of the ambitious path to reduce carbon emissions by at least 68% by 2030, Energy Secretary Ed Miliband has spearheaded policies to redirect investment from the oil and gas sector toward renewable energy projects with a particular focus on solar and wind energy.
The Labour government has also promised substantial funding for Great British Energy – a planned clean energy company that will be publicly owned.
A report released earlier this month by the National Energy System Operator (NESO) said Labour’s ambitious 2030 climate targets are achievable, but at a significant cost.
Energy Secretary Miliband has touted the report as ‘conclusive proof’ that Labour’s plan to make the UK a ‘clean energy superpower is the right choice’, defending the march toward renewable energy by arguing: ‘Clean energy we produce at home is cheaper than fossil fuels and more secure because dictators can’t control it.’
But the uncompromising stance has sparked backlash from fossil fuel companies, union leaders and politicians representing oil-dependent regions, particularly in Scotland.
According to the report, the UK would need to invest around £40billion annually by the end of the decade, the report states, which will be passed onto taxpayers in the form of higher bills.
Meanwhile, consumers would have to reduce their energy usage at peak times.
The report also says that a massive expansion of countryside and sea wind turbines and fields of solar panels is required.
Around 4,500km of undersea cables will have to be installed along with 1,000km of new power lines, including pylons – doubling the total amount built in the past ten years.
